The present invention relates to the art of pulse code modulated telecommunication systems, and, more specifically, to a telecommunication system and to a transducer in which the pulse code modulation is generated at each telephone handset. Pulse code modulation for use in telecommunication systems is not new, per se. In a typical system, a central office services a large number of telephone handsets. Each telephone is connected to the office by a pair of insulated wires. The wires connecting each telephone with the central office carries only analog signals. Pulse code modulation and demodualtion occurs at a central office and is used in time division multiplex interoffice trunking schemes. The central office includes switching circuitry and digital to analog and analog to digital converters as part of the pcm-tdm interoffice trunking circuitry. These converters are fairly sophisticated circuits. The advantage of this system is the ability of transmitting several signals from one central office to another over a single pair of wires. However, this system, as well as the non-pulse code modulated system, makes inefficient use of the cable connecting the telephones with the central office.